Three major indexes fall together amid AI bubble debate… Nasdaq 1.21%↓ [New York market briefing]

Dow·S&P500 down for a fourth trading day

Caution grows on expectations of a U.S. rate pause

Bitcoin briefly falls below the $90,000 level

Amid lingering debate over a possible bubble in AI-related stocks, the three major U.S. stock indexes in New York fell together.

On the 18th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 46,091.74, down 498.5 points (1.07%) from the previous session. The Standard & Poor's (S&P) 500 index fell 55.09 points (0.83%) to 6617.32, and the tech-heavy Nasdaq Composite fell 275.23 points (1.21%) to 22,432.85. By the Dow and S&P500 measures, this marked a fourth consecutive trading day of weakness.

Concerns that AI company valuations are excessively high have spread, increasing risk-asset aversion.

Google CEO Sundar Pichai, asked whether Google could avoid being hit if an AI bubble bursts, said, "I don't think there is any company that is immune," adding, "This applies to Google as well."

JPMorgan Chase vice chairman Daniel Pinto said there will "probably be some (valuation) adjustments" targeting the AI industry.

Expectations that the U.S. Federal Reserve (Fed) could hold interest rates steady in December have also heightened investors' caution.

David Morrison, senior market analyst at Trade Nation, said, "Concerns about the tech sector are weighing on stock prices, and investors are increasingly removing the possibility of an additional Fed rate cut next month from prices."

Bitcoin trading below the $90,000 level before the New York market opened also cooled investor sentiment.

Most major tech stocks fell. NVIDIA, regarded as a leading AI stock, dropped 2.81%, and other major big tech names such as Microsoft (-2.70%) and Amazon (-4.43%) also saw large declines.

Meta, Facebook's parent company, reduced its morning losses after winning an antitrust lawsuit brought by U.S. regulators, but it failed to turn into gains and closed down (-0.72%).

Major chip stocks such as AMD (-4.25%) and Micron (-5.56%) also fell sharply.

Anthropic, a competitor of OpenAI, announced it had entered a strategic partnership with Microsoft and would purchase approximately $30 billion (about 44 trillion won) worth of Microsoft cloud services, but it was insufficient to revive investor sentiment in AI-related stocks.

Home Depot plunged 6.02% after lowering its annual outlook, and other major retailers such as Walmart (-1.52%), which are set to report earnings this week, also showed weakness.

Cloudflare, the web infrastructure company blamed for causing access outages to many sites including ChatGPT and X (formerly Twitter) earlier in the day, fell 2.83%.

Trump Media, the parent company of Truth Social owned by U.S. President Donald Trump's family, posted its sixth consecutive day of weakness, falling to $10.73 and hitting a record low.

Investors are awaiting Nvidia's earnings report on the 19th and the September employment report scheduled for the 20th.

Marta Norton, investment strategist at asset management service Empower, said, "As we enter earnings season, companies are generally reporting strong results, but there is a significant re-pricing of investor sentiment," adding, "There is still a sense of fear in the market."

The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) surged 2.31 points (10.32%) to 24.69.

Ko Jeong-sam Hankyung.com reporter jsk@hankyung.com